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Dama Financial, Leading Provider of Access to Banking & Financial Solutions for Cannabis Businesses, Announces Completion of $12.6 Million Growth Equity Raise

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Dama will leverage the new round of investment to accelerate its already impressive growth, continue to address the lack of financial service products being offered to the cannabis industry, recruit top talent, and scale the business with the backing and support of its investors.

CALIFORNIA: Dama Financial, the premier provider of access to banking and payment solutions through its FDIC-insured banking partners for the rapidly growing legal cannabis industry, today announced the completion of its $12.6 million Series B funding round, bringing Dama’s total funding to approximately $24 million to date. The round was led by a group of strategic new investors.  Currently serving over 7% of the legal cannabis businesses in California, operational in 12 states and with over 50,000 consumers with digital wallets in the United States, Dama has processed over $2 billion in transaction value since inception.

“In one of the fastest-growing industries in the world, Dama is bringing desperately needed financial services to businesses and consumers alike that are safe, secure, compliant and efficient,” said Anh Hatzopoulos, CEO and Co-founder at Dama. “We have spent four years building a platform to enable safe, compliant financial services for cannabis businesses and now is the time to take Dama to the next level.”

“Dama has brought together the right team and technology that will position them as a clear payment solutions leader in the cannabis industry for years to come,” said Dan Englander, of Ursula Investors. “Dama continues to innovate solutions for the serious payments problems faced by the industry and we are excited to see that accelerate. ”

Since November 2020, six new states have passed legalization measures for cannabis and a record-high percentage of Americans now support legalization. The cannabis industry is one of the fastest-growing in the world with the global cannabis market expected to hit $47 billion and U.S. sales of legal cannabis expected to quintuple by 2025. According to Arcview Research, legal cannabis sales in 2019 grew by 46% to $14.8 billion, which represents the highest annual rate of growth to date. Dama’s payment solutions solve complicated banking problems for cannabis dispensaries and facilitate seamless consumer transaction at mobile points of sale.

SAFE Banking Act Reintroduced as Momentum for Cannabis Reform Continues to Grow

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Landmark, bipartisan legislation passed U.S. House multiple times in last two years

DISTRICT OF COLUMBIA: U.S. Rep. Ed Perlmutter (CO-07) reintroduced his landmark legislation to reform federal cannabis laws and reduce the public safety risk in communities across the country. The bipartisan Secure and Fair Enforcement (SAFE) Banking Act of 2021 – authored by Perlmutter and sponsored by Reps. Nydia M. Velázquez (D-NY-07), Steve Stivers (R-OH-15), and Warren Davidson (R-OH-08) and cosponsored by more than 100 members – would allow marijuana-related businesses in states with some form of legalized marijuana and strict regulatory structures to access the banking system. The SAFE Banking Act is seen as the first of many cannabis reforms Congress needs to address.

Forty-seven states, four U.S. territories, and the District of Columbia – representing 97.7 % of the U.S. population – have legalized some form of recreational or medical marijuana, including CBD. Yet current law restricts legitimate licensed marijuana businesses from accessing banking services and products, such as depository and checking accounts, resulting in businesses operating in all cash. This is a serious public safety risk for our communities, inviting theft, robberies, burglaries, or worse, as Colorado saw with the murder of Travis Mason in June 2016 and Michael Arthur in Portland, Oregon in December 2020.

“The genie is out of the bottle and has been for many years. Thousands of employees and businesses across this country have been forced to deal in piles of cash for far too long, and it is the responsibility of Congress to step up and take action to align federal and state laws for the safety of our constituents and communities. The public safety need is urgent, and a public health and economic need has also emerged with the pandemic further exacerbating the cash-only problem for the industry,” said Congressman Perlmutter. “In many states, the industry was deemed essential yet forced to continue to operate in all cash, adding a significant public health risk for businesses and their workers. As we begin our economic recovery, allowing cannabis businesses to access the banking system would also mean an influx of cash into the economy and the opportunity to create good-paying jobs. Thank you to Reps. Velázquez, Stivers and Davidson for their continued support and input on the bill, and I look forward to working with Senators Merkley and Daines to get the SAFE Banking Act passed in the Senate and signed into law.”

“The cannabis industry has been operating with great success, with many of these businesses deemed essential as the coronavirus pandemic took hold,” said Congresswoman Velázquez. “However, without the ability to safely utilize the banking system, cannabis-related businesses are left behind and stuck resorting to tactics that can threaten public safety and economic success. That’s why I am proud to join to Reps. Perlmutter, Stivers, and Davidson in introducing the SAFE Banking Act, to allow these business in states that have legalized cannabis to access to the banking system, just as any other business currently enjoys. Doing so will help create jobs in communities throughout America, while stimulating the economy as we recover from the fallout of the pandemic.”

“We have a responsibility to legislate for the reality we live in, and the reality is that legal businesses in thirty-three states, including Ohio, are being denied access to the banking system and forced to assume huge risks as a result of operating solely in cash,” Congressman Stivers said. “The SAFE Banking Act is about keeping people safe, something that 321 of my colleagues recognized last year. I look forward to seeing this bill make it all the way to the President’s desk this Congress.”

“I’m excited we’re reintroducing SAFE Banking, again with bipartisan support. This bill is an important hedge against financial cancellation, and it will protect businesses and industries that find themselves out of favor with the latest trends of the day,” said Congressman Davidson. “Today we’re talking about banking cannabis, hemp, and firearms, but tomorrow there could be another industry that has its access to the banking system threatened by statute or by public opinion. With SAFE Banking, as long as its legal in the jurisdiction, no bank should be compelled to cancel their customers by a mob saying, ‘You aren’t going to bank THOSE people are you?’ Sadly, that has already happened too often in American history and it must end.”

“No one working in a store or behind a register should have to worry about experiencing a traumatic robbery at any moment. That means we can’t keep forcing legal cannabis businesses to operate entirely in cash—a nonsensical rule that is an open invitation to robbery and money laundering,” said Senator Merkley (D-OR). “Let’s make 2021 the year that we get this bill signed into law so we can ensure that all legal cannabis businesses have access to the financial services they need to help keep their employees safe.”

“The ‘SAFE Banking Act’ will help Montana small businesses, create jobs, boost local economies, and improve public safety,” stated Senator Daines (R-MT). “I’m glad to be working on this bipartisan legislation to provide certainty for small businesses in Montana. Montana business owners should have the ability to freely use banks, credit unions and other financial institutions without the fear of punishment.”

In the 116th Congress, 206 members cosponsored the SAFE Banking Act and it passed the U.S. House in a broad bipartisan vote of 321 to 103, with 91 Republicans and one Independent voting in support. The bill also passed as part of the Heroes Act, an earlier COVID relief package which was approved by the House on two separate occasions. In February 2019, the SAFE Banking Act prompted the first-ever congressional hearing on the issue of cannabis banking.

The SAFE Banking Act provides protections from money laundering laws for any proceeds derived from these state-legal marijuana businesses. This will get cash off the streets and into the financial system which is built to root out fraud and illicit activity. This bill also includes protections for hemp and hemp-derived CBD related businesses, which still struggle in accessing financial services despite the legalization of hemp in the 2018 Farm Bill. The current version of the bill has been updated slightly to include minor technical changes to the safe harbor, strengthened hemp provisions, and other technical updates.

The U.S. cannabis industry continues to grow at a rapid rate, with the current value estimated at $17.7 billion, a substantial amount of which remains unbanked. As of January 2021, the legal cannabis industry supports 321,000 jobs across the country. Over the 2018-2028 period, job growth in this market is projected to climb 250%, the fastest rate for any sector in the U.S. Bringing in this cash will make the industry safer and give banks and credit unions more capital to lend during the economic recovery as a result of the COVID-19 pandemic.

Congress’ Summer Fling With Marijuana

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DISTRICT OF COLUMBIA: It’s not easy being the DEA these days. After an unprecedented losing streak on Capitol Hill, the once-untouchable Drug Enforcement Administration suffered last week what might be considered the ultimate indignity: A Senate panel, for the first time, voted in favor of legal, recreational marijuana.

Last Thursday, the Appropriations Committee voted 16-14 on an amendment to allow marijuana businesses access to federal banking services, a landmark shift that will help states like Colorado, where pot is legal, fully integrate marijuana into their economies. As significant as the vote was, it’s only the latest vote in a remarkable run of success marijuana advocates have had this year on Capitol Hill.

“The amendment was a necessary response to an absurd regulatory morass,” Montana Sen. Steve Daines, one of the three Republicans to support Thursday’s amendment, tells Politico, referring to the multifaceted and complex system of laws that have been enacted over the past four decades to prosecute a war on marijuana. It’s a war that began on or about May 26, 1971, when President Richard Nixon told his chief of staff Bob Haldeman, “I want a goddamn strong statement on marijuana …I mean one on marijuana that just tears the ass out of them.”

Bipartisan Marijuana Banking Bill Introduced In The Senate

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DISTRICT OF COLUMBIA: Reflecting growing public support for changing the nation’s drug laws, a bipartisan group of senators on Thursday introduced the chamber’s first bill that would legalize banking for recreational marijuana companies.

Introduced by the Senate delegations from Oregon and Colorado, two of the first states to legalize recreational marijuana, the bill would prohibit the federal government from penalizing banks that work with marijuana businesses.

Though four states and the District of Columbia have legalized marijuana, the drug is still illegal under federal law. That makes it difficult for businesses operating in those legalized states to access financial services through the banking industry. Instead, those companies have to run all-cash operations that the senators say invites crime.

Fardon: ‘Careful’ Banks Can Invest In Legal Illinois Marijuana

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ILLINOIS:  Banks that accept money from legal Illinois marijuana growers won’t “come on our radar for prosecution” if they are “careful” and “transparent” and “follow the laws,” U.S. Attorney Zach Fardon said.

Addressing the issue of Illinois’ move to legalize medical marijuana in the new year in public for the first time Wednesday morning, Fardon acknowledged the growing gap between lenient state marijuana laws and harsher federal laws presented him with a “tricky paradigm.”

But speaking to a breakfast meeting at the downtown Union League Club, Fardon offered qualified reassurance to legitimate businesses looking to cash in on legal weed.

“So long as they follow these laws that are in place, I don’t expect they will come on our radar for prosecution,” Fardon said, adding that it would take time for all the issues between the conflicting state and federal laws to be worked out.

 

Big U.S. Banks Seek New Clarity On Risks Of Marijuana-Linked Accounts

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MISSOURI: Major banks are getting increasingly wary of some transactions with smaller banks that have begun to allow marijuana businesses to open accounts. Officials at the bigger institutions say they fear being in breach of anti-money laundering laws and are pressing federal authorities to make it clear what is legitimate and what is illegal.

The problem arises because in Colorado and Washington states, marijuana for general use is legal, and in a host of other states it is legal for certain medicinal purposes. But the business is still illegal under federal law, and U.S. banks are required to report transactions that they suspect involve money earned through illegal activities.

The bankers, including anti-money laundering officials at three of the biggest U.S. banks, expressed concern that their firms could face civil and even criminal penalties not only for dealing with any of the businesses directly but also handling money from the estimated dozens of small and mid-sized banks that have begun working with the marijuana shops or their suppliers.

The bankers say the U.S. Treasury Department’s anti-money laundering unit needs to clarify its expectations for the handling and reporting of wire transfers and other payments that involve people and entities linked to state-sanctioned marijuana businesses.

More Than 100 Banks, Credit Unions Serving Pot Businesses: Feds

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DISTRICT OF COLUMBIA: There are 105 U.S. financial institutions providing banking services to marijuana dispensaries and other pot businesses, a top federal official is expected to reveal in a speech Tuesday.

The speech provides the most detailed look yet at the impact of marijuana guidance the Financial Crimes Enforcement Network issued to banks and credit unions in February, though it’s unlikely to resolve the lingering doubts that many banks still have.

Marijuana shops, which generate large amounts of cash and can be targets of thieves, have been lobbying for more access to the mainstream financial system. The guidelines were meant to encourage financial institutions to do business with the industry provided they met certain criteria, and Fincen Director Jennifer Shasky Calvery is expected to declare that the agency’s goal has been achieved.

“From our perspective the guidance is having the intended effect,” Shasky will say, according to a copy of her prepared remarks that Fincen provided to American Banker. “It is facilitating access to financial services, while ensuring that this activity is transparent and the funds are going into regulated financial institutions.”

However, the speech does not say whether the guidance has made banks and credit unions any less wary of the risks involved in working with an industry that, while legal in around 20 states, is still banned under federal law. Banks and credit unions may be especially wary of the pot business at a time when many in the financial industry believe that regulators have heightened expectations with regard to their compliance with the Bank Secrecy Act.

When Fincen released its guidance, it sought to walk a fine line between encouraging banks to take the plunge and warning of the consequences if they failed to comply with a detailed series of guidelines.

Shasky is expected to say Tuesday that the 105 banks and credit unions with connections to the pot business are located in states representing more than a third of the country. That compares with 87 financial institutions in Colorado alone that had relationships with marijuana dispensary businesses between June 2011 and September 2012, according to a Fincen report from last year.

The 105 institutions that are currently working with marijuana firms represent less than 1% of all banks and credit unions nationwide.

House Votes To Allow Marijuana-Related Banking

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DISTRICT OF COLUMBIA:  The House voted Wednesday in support of making it easier for banks to do business with legal pot shops and providers of medical marijuana.

The 236-186 vote rejected a move by Rep. John Fleming, R-La., to block the Treasury Department from implementing guidance it issued in February telling banks how to report on their dealings with marijuana-related businesses without running afoul of federal money-laundering laws.

Marijuana dealing is still against federal law so banks who do business with marijuana dispensaries could be accused of helping them launder their money. Federal money laundering convictions can mean decades in prison.

The Treasury guidance was intended to give banks confidence that they can deal with marijuana businesses in states where they’re legal. Many banks are still reluctant to do so.

 

Only One Hiccup For Pot Shop’s Opening Day

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WASHINGTON:  The first pot shop to open in Bellingham and the state,Top Shelf Cannabis, had one hiccup in an otherwise successful opening.

Chase Bank refused to give them change for smaller bills.

Manager Sigrid Williams says when they started to run out of one and five dollar bills, they tried to ask Chase Bank for change.

She says they’re hoping to work out an arrangement with a smaller bank in Seattle, soon.

This Las Vegas Bank Eager To Do Business With Would-Be Marijuana Dispensary

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NEVADA:  If finance executives are worried about getting involved with medical marijuana clients, don’t tell Las Vegas banker John Sullivan.

First Security Bank of Nevada, led by CEO Sullivan, has signed on to manage cash and other banking transactions for would-be dispensary operator GrowBLOX Sciences.

GrowBLOX, which said it “operates with the utmost compliance integrity,” said its arrangement with First Security would eliminate the “cash only” status of medical marijuana shops that has left them vulnerable to devastating theft.